The other user's not exactly wrong. These neighborhood committees (usually older aunties) are called juweihui. They existed when my mom grew up in mainland China in the 70s/80s, and my friends (Gen Z international students from China) have them in their own neighborhoods as well. I think they're voluntary, but you have to take an exam to be a part of one and generally people join them the same way American suburban moms might join a homeowners' association.

While I'm not sure if the system is the exact same as it was when my mom was growing up in the 70s/80s, my mom (from mainland China and fairly positive about China) compares it to a more stringent/nosy version of an American HOA. They'd knock on the doors of families with fathers who were committing adultery (during Mao Zedong's era, adultery was punishable). She said everyone knew they would report you to the party if you were doing something way out of line—just as the other user you were replying to noted—but generally people weren't that worried about it. They also do good like visiting a family if their kid just got into an accident.

Modern-day dramas sometimes include those neighborhood watch aunties as characters as well. You can read about it here if you're curious, just in case you'd like a source: https://www.theworldofchinese.com/2019/05/vigil-aunties/.